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President Joe Biden on Wednesday announced that the federal consumer watchdog is cracking down on overdraft and depositor fees that often surprise Americans, deeming them unfair and likely violations of consumer protection laws. The move could save consumers more than $1 billion per year, Biden said.
Some examples of these “unfair hidden fees” given by Biden were bounced check charges, bank overdraft fees, credit card late fees, resort charges at hotels, processing fees for concert tickets and “those huge termination charges to stop you from switching cable and internet plans to a better deal,” Biden said Wednesday.
“These are junk fees. They’re unfair, and they hit marginalized Americans the hardest, especially low-income folks and people of color. They benefit big corporations, not consumers, not working families,” the president said. “Today’s actions are going to save consumers more than $1 billion each year.”
Here’s what’s being done now:
- The Consumer Financial Protection Bureau issued guidance on Wednesday that effectively bans surprise overdraft fees when customers have been told they had sufficient funds, and also depositor fees for checks that bounce. The guidance explains that these practices are unfair and unlawful.
- The CFPB is also now developing rules on other banking and credit card fees.
- The Federal Trade Commission last week voted to begin a rule-making process to reduce junk fees across event ticketing, hotels and funeral homes.
Last month, the Department of Transportation similarly proposed a new set of rules proposed by the Biden administration that would see airlines disclose “surprise fees” up front.
Under that proposal, the first time airlines display their flight price to potential customers, they’d have to disclose fees for baggage, changes, cancellations and sitting with your children. They’d also have to provide refunds for services that passengers paid for but didn’t receive — like if the onboard Wi-Fi is busted.
“I know it’s been a tough few years, but from day one, my administration has been laser-focused on easing the burden facing working-class families and giving them, as my dad would say again, just a little breathing room,” Biden said.
Eliminating the two banking fees will save consumers more than $1 billion a year, the White House said in a statement. The administration has been pushing banks to drop overdraft and other fees related to having insufficient funds and this year overdraft fees are expected to be down 20% compared to 2019, the White House said
